Providing for your Childrens' future

Many of you have already begun to ponder how you and your spouse will put your children through college. It is never too early to begin and implement a plan now, whether your child is 2 or 18 and beginning their first semester this fall.

You may be thinking "college is so expensive," I just don't think we will be able to send Jr. to a university this year. The first thing for you to do is change that thinking to a more positive mien. You can and you will.

Let me begin by telling you about my own college experience ten years ago. I come from a split family; my parents divorced when I was in third grade, and it was always expected that I would go to college and get a degree. My mom was a nurse and my dad was a foreman at the company he worked for. Both of them made what I would consider to be middle class income.

Even though they both made a good wage, my mother had her own student loans that she was still paying back when it was time for me to go off to college. And so, my parents came up with a plan. My mom paid for my books and tuition and my dad paid for my living expenses. They went halvesies, and that worked for them. My mom had to take extra shifts in order to pay for her part because she hadn't planned for my future. She was willing to sacrifice.

The point I am trying to come across to all of you is that you don't have to wait until the last minute and "sacrifice" to put your children through college. So many parents believe that student loans are okay to have, but do you really want your child to begin their adult life having to pay back an exorbitant amount of money if you can plan now to help them out? I know I don't want that.

So, first things first. Let's take a look at what the average cost of four years of college are (this includes tuition, books, and living expenses).

• Tuition costs: if your child attends a university in state that is public, the average yearly tuition will range anywhere from $5000-$10,000 compared to out of state which will tack on an several extra thousand $15,000-$25,000. If you cut the above listed amount in half, that is what you will be paying per semester. My suggestion is that you have your child attend in state as this does lessen tuition costs.


• Books: These costs will vary depending on the course work and whether your student purchases used books or new books. Used books are definitely cheaper and most are in pretty good condition, but these are not always available, so be prepared to pay for new ones. Plan to spend anywhere between $300 and $600 per semester in books and learning supplies that your student will need. So per year your child will spend an average of $600-$1200 in books and supplies.


• Housing/food costs: This is where the topic can be a little fuzzy. There are several options for you. If your student is attending a university within driving distance, then they can reasonably remain at home and cut your costs of living expenses considerably. If they are living too far to commute to school, then apartment or dorm living is going to be the best bet. Dorm fees cover housing and a meal plan and average $10,000-$15,000 per year (10 mos). This typically covers their room and a meal plan that serves at least 2 meals a day. If you plan for your student to live on their own, then depending on where they will be living, do some research and average in total costs of monthly rent, electricity, water, trash, cable, telephone/internet, food costs, gas costs.


• If your student goes to a private university, your costs will be higher. Plan to pay upwards of $21,000-$40,000 per year for tuition and an average of $10,000-$20,000 per year for books/living expenses. These rates are higher because private universities do not typically get government funding so they are paying their "own way".

Now, the question is, how do I pay for this? Just in tuition for four years, you will pay between $20,000 and $40,000. For this article, we will pick the midpoint of $30,000 just for tuition. For the sake of argument, let's say my student will live in a dorm for those four years, leaving me paying at the midpoint of $50,000 for dorm fees and about $900 per year in books/supplies for a total of $3600. So I am looking at a total expense for four years of college at $83,600. You may be looking at that number and screaming at the screen right now! There are other options, this is just an example of what four years can cost your student. Now imagine them paying for that plus interest. Already, you have put them in the hole for loans for about $100,000. That is definitely not something I want my children to have to deal with.

Early planning is key. Here are some steps for you to being with for beginning college funds.

• Step 1: open a college savings account per each of your children (we have two open for our two children). If you don't have a USAA account, I suggest you open with them. They have great financial advice and can get you where you need to be.


• Step 2: put $50-$100 per month away per child- you'll find at the end of a year, you'll have already saved up between $600-$1200 per child.


• Step 3: when each account has reached an amount of about $3,000 move the money into a money market (CD) account. These accounts have a higher paying interest with one requirement of a minimum initial amount. This is a key step!


• Step 4: talk to your bank about a college savings plan if you already have accounts open for your children's future.


• Step 5: watch the amounts grow! Before you know it- especially if you began when your child was 2- you will see that paying for college is very affordable.

Also, don't be afraid to look for an apply for scholarships. There are so many out there for students and half of them aren't being utilized. Depending on your state, there may also be other "programs" available for the children of service members. Each state will differ, so just do your research.